#tax # As of early 2026, the tax regime for Bitcoin and other Virtual Digital Assets (VDAs) in India remains largely unchanged from the strict framework introduced in 2022. Despite industry hopes for relief in the Union Budget 2026, the government has maintained the status quo while tightening compliance.
Here is the breakdown of BTC taxation in India for the 2026-27 period:
1. Flat 30% Tax on Gains
Any profit made from the transfer (selling, swapping, or spending) of Bitcoin is taxed at a flat rate of 30%.
No Slab Benefits: This rate applies regardless of your total income or how long you held the BTC.
Calculation: You can only deduct the cost of acquisition (purchase price). You cannot claim deductions for electricity, internet, or exchange fees.
Cess/Surcharge: An additional 4% Health and Education Cess is applied to the tax amount, along with applicable surcharges.
2. 1% TDS (Tax Deducted at Source)
A 1% TDS is deducted at the time of sale or transfer of Bitcoin.
Traceability: This is designed to help the government track crypto transactions.
Indian vs. Foreign Exchanges: Indian exchanges usually deduct this automatically. If you trade on a foreign exchange or via P2P, the responsibility to deposit this TDS may fall on you.
Threshold: Generally applies if your total transactions exceed ₹50,000 in a financial year (or ₹10,000 for certain specified persons).
3. No "Loss Set-Off"
This is one of the strictest rules in the Indian crypto tax code:
You cannot offset losses from one coin against gains from another. For example, if you lose ₹10,000 on Ethereum but gain ₹10,000 on Bitcoin, you still owe 30% tax on the ₹10,000 Bitcoin profit.
Losses cannot be carried forward to future years.
4. New 2026 Penalties & Reporting
The 2026-27 Budget introduced stricter penalties for non-compliance, effective April 1, 2026:
Daily Fines: Entities failing to file required statements on crypto transactions face a penalty of ₹200 per day.
Inaccurate Reporting: Providing incorrect information in tax filings can lead to a flat penalty of ₹50,000.
Schedule VDA: All transactions must be reported under "Schedule VDA" in your Income Tax Return (ITR).